A substantial EBITA margin improvement

The Challenge

A well-established European automotive Original Equipment Manufacturer (OEM), with global operations, had enjoyed strong and profitable growth for many years. However, several external factors, such as new CO2 limitation measures and the need to engage in electro mobility, were starting to take their toll financially. As a result, the company was facing a potentially significant EBIT reduction in coming years.

To overcome potential performance impact, Oliver Wyman was brought in to run a comprehensive multi-year profit improvement program, designed to secure financial targets over the next few years.

Our Breakthrough

To maximize performance improvement, we tailored the program around the following areas: market exploitation, offer optimization, profits from connected services, product costs, non-personnel costs, production costs, and further fixed costs

To steer the efforts, our team implemented a project management office (PMO) tasked with steering the workstream activities, creating transparency, measuring progress, identifying risks, to ensure timely and successful project delivery and P&L-impact.

Through our comprehensive governance model, we communicated progress regularly to our client, and thus ensured proper decision making by the executive board. 

Our Impact

The program yields a high multi three-digit million Euros EBIT contribution leading to a significant share of the company’s overall profitability In addition, in tandem with our client we identified additional ‘next wave’ areas for ambitious profit potential, outlining ramp-up curves, and detailed steps on how to implement these measures.